Death bonus row hits tobacco shares

SHARES in some of the Britain's leading tobacco companies fell sharply today as a row raged over a report that said early deaths caused by smoking could save countries money.

US cigarette giant Philip Morris was lambasted for arguing that savings in health care and pension costs far outweighed the cost of looking after sick smokers.

In the UK, the Tobacco Manufacturers' Association, which represents companies behind brands such as Benson & Hedges, Silk Cut, Regal and Rothmans, declined to comment.

Liz Buckingham, of Imperial Tobacco, which makes brands such as Regal, said: 'This is an independent study by Philip Morris and we have not done anything along these lines ourselves. It would be inappropriate to comment on their study because we don't have our own figures.' Imp's shares fell 7p to 807p on the London Stock Exchange. A spokeswoman for BAT, makers of Rothmans, also declined to comment. Its shares were down 7p at 548p. Gallaher, the firm behind Silk Cut and Benson & Hedges, was down 1/2p at 460p.

Anti-smoking groups condemned the stance, which came in a report from the company to the Czech Republic, where Philip Morris makes the Marlboro brand and controls 80% of the market.

The report suggested to the Czech government that it was saving about £100m a year in health care and pension costs because people who smoke die early.

Michelle Di Leo, a spokeswoman for the British Lung Foundation, said: 'What will Philip Morris argue next - that we should put people down at 50 because it would save us all a lot of money on health care?'

In the US, the president of the Campaign for Tobacco-Free Kids, Matthew Myers, said: 'Would a responsible, reformed tobacco company tell foreign governments that dead smokers are a good thing for their budgets? Philip Morris is doing exactly that.'

Rimi Calvert, a spokesman for Philip Morris in Switzerland, said: 'It is very unfortunate that this is one aspect of the study that is being focused on. We understand it appears quite cold, but tobacco is a very controversial product.'

He said the purpose of the report was to set out the balance of costs and savings and it included all sorts of elements, such as revenue analysis and tax savings. He added: 'We had no intention of trying to present a 'positive' side to smoking to society. It is simply part of the balance.'

Clive Bates, of UK pressure group Action on Smoking and Health (Ash), said today: 'I am so disgusted by this I can hardly contain myself. It is obscene. What they are trying to do is to whisper in the ear of the Czech government saying, 'We are helping you by killing off people, so don't do too much to encourage people to give up smoking'.'